As we enter into Samvat 2078, leaving behind a very successful Samvat 2077, there are some investment ideas that an investor can explore. SAMVAT 2078 will be a year of balance sheet leverage, led by significant improvement in corporate profitability, says Axis Securities.
“Overall, the Indian market has entered into an earning’s up-cycle with an expectation of more than 20% growth in Nifty’s earnings in the next two years. With faster economic recovery on the cards, more cyclical sectors are likely to join the rally with the expectation of higher government spending moving forward,” it said in Samvat 2078 note.
Factoring in all economic and market developments, Axis Securities brings you a list of 10 stocks belonging to different sectors and themes. These stocks are: SBI Life, ICICI Securities, Cholamandalam Investment, Can Fin Homes, KNR construction, ACC, Cyient, Mindtree, APL Apollo Tubes and Safari Industries. Let’s have a look at them one by one and check the target price set by the brokerage firm.
1. ACC Limited
CMP: Rs 2236; Target Price: Rs 2,570; Upside: 15%
Axis Securities believes capacity expansion and premiumization will drive growth in this stock. The company is expanding its cement grinding capacity by 14% from the present 34.5 million tons per annum (mntpa) to 39.2 mntpa. This will enable it to cater to the high-demand market of Central India which is exhibiting promising growth potential driven by increasing housing and infra-activities. The new capacity is expected to be commissioned in CY22. Factoring in the additional capacity and robust demand, we expect the company to deliver volume growth of 7% CAGR over CY21-CY23E and clock revenue CAGR of 9% over the same period, it said.
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Established by merging ten cement companies in 1936, the company has 17 modern cement factories, 79 ready-mixed concrete plants, a vast distribution network of over 11,000 dealers, and pan-India sales offices
CMP: 1,094 Target Price: 1,300 Upside:19%
The brokerage firm second pick came from service sector. It is of the view that resilient business structure and long-term Contracts will accelerate growth is India’s leading ER&D services provider. Headquartered in Hyderabad, Cyient is India’s leading ER&D services provider. It leverages its strong infrastructure and capabilities to provide world-class ER&D solutions to verticals, including A&D, Communication, Railways, Oil & Gas, Hi-tech, and manufacturing, among many others.
CMP: Rs 4,555 Target Price: Rs 5,100 Upside:12%
Saying encouraging growth and superior visibility will drive action in this stock, Yes Securities picked Mindtree Ltd from IT space. Mindtree is a part of L&T group and is one of India’s leading IT services and specialized digital solutions providers based in Bengaluru. It provides industry-wide solutions including next-gen services such as Cloud computing, Digital transformations, IoT, and Machine learning, among others. The company also has expertise in providing solutions in Hi-Tech, Manufacturing, Banking and Financial Services.
4. ICICI Securities
CMP: 763; Target Price: 940; Upside: 23%
The brokerage picked ICICI Securities based on robust Q2FY22, its focus on augmenting distribution business and good valuation. ICICI Securities Limited (ISEC) is an integrated and technology-based firm offering a wide range of services including retail and institutional broking, financial products distribution, private wealth management, and advisory services. The company’s total asset under management (AUM) stands at Rs 5.1 Tn across different products. Currently, it is the 4th largest broker (in terms of NSE active clients) and commands a market share of 8.6%
5.CAN FIN HOMES
CMP: Rs 656 Target Price: Rs 800 Upside:22%
Yes Securities picked Can Fin Homes based on anticipation of pick up in loan growth and strong asset quality. Can Fin Homes, promoted by Canara Bank (30% stake), is a 33-year-old retail-focused housing finance company. Headquartered in Bangalore, it has a pan-India presence with over 160 branches, 21 Affordable Housing Loan Centers, and 14 Satellite Offices spread across 21 States/Union Territories.
6. CHOLAMANDALAM INVESTMENT AND FINANCE CO LTD
CMP: Rs 604 Target Price: Rs 690 Upside:14%
The reason behind picking this share was diversified portfolio, expectation of improving collection trends, demand pick up. Cholamandalam Investment and Finance Company Ltd (CIFC) is a well-diversified play in secured asset segments such as vehicle finance and home equity (loan against property). Diversification across segments and geographies along with better access to funds (via parentage and strong credit practices) enable CIFC to withstand macro headwinds better than its peers.
7. SBI LIFE INSURANCE
CMP:1172Target Price:1350 Upside:15%
Saying that this insurance company has huge potential for growth, Yes Securities picked SBI Life Insurance Company (SBIL) as its next pick for Samvat 2078. SBIL was established as a JV between the State Bank of India and BNPPC – an insurance subsidiary of BNP Paribas. SBI Life enjoys a strong competitive advantage on account of its bancassurance with the State Bank of India. Additionally, its diversified product mix and strong distribution capabilities pave the way for the company to achieve faster growth and market share gains.
8. APL Apollo Tubes
CMP: Rs 807 Target Price: Rs 960 Upside: 19%
The idea behind picking this one was robust performance backed by strong fundamentals, said the brokerage. APL Apollo Tubes (APAT) is one of India’s leading branded steel products manufacturers. Headquartered at Delhi NCR, the Company runs 10 manufacturing facilities churning out over 1,500 varieties of MS Black Pipes, Galvanized Tubes, Pre-Galvanized Tubes, Structural ERW Steel Tubes and Hollow Sections to serve industry applications like urban infrastructures, housing, irrigation, solar plants, greenhouses and engineering.
9. Safari Industries
CMP: Rs 840 Target Price: Rs 930 Upside: 11%
Yes Securities is of the view that pick up in both domestic and international travel and less dependence on China for sourcing will aid this stock. Safari Industries India (SAFARI) Limited is engaged in manufacturing and trading of luggage and luggage accessories. The Company’s product range includes polycarbonate (PC) zippered luggage. It also offers products under various categories, such as laptop bags and backpacks. It backpacks categories include Everyday Casual Backpack, Laptop Backpacks, Rucksack, Concept Backpacks, Overnighter etc.
10. KNR Constructions Limited
CMP: Rs 282; Target Price: Rs 325 Upside: 15%
The brokerage believes this share is well-positioned to capitalize on the Industry tailwinds. Proactive government support and robust growth visibility will help this infra share. KNRCL is one of India’s leading infrastructure companies that provide Engineering, Procurement and Construction (EPC) services. Over the years, it has developed expertise and capabilities to efficiently and timely execute technically complex projects on an individual as well as a joint venture basis. The company is currently handling 10operational HAM (under-construction), BOT, and Annuity projects in addition to sizable EPC irrigation and flyover projects.